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‘Pricing no gimmick’

‘Pricing no gimmick’

Author | exchange4media News Service | Thursday, Aug 26,2004 7:59 AM

‘Pricing no gimmick’

Air Deccan’s new interactive pricing mechanism, which allows passengers to travel at as low as Rs 500 and as high as Rs 7,500 (still 30 per cent cheaper than the conventional trunk route players), is no “gimmick”, says Air Deccan managing director Capt GR Gopinath.

“It is no gimmick. We use an interactive pricing technique which helps us sell tickets at affordable rates,” he indicated. According to Mr Gopinath, at least 25 per cent of the seats in any trunk route flight go vacant. Air Deccan offers these seats for rates between Rs 500 and Rs 2,500, on a first-come first-serve basis.

“The first five customers who reserve seats 90 days in advance for the 180-seater gets the ticket for Rs 500. The next five get the tickets for Rs 700 and so on, up to Rs 2,500, Air Deccan sells around 40 tickets at very low rates, Mr Gopinath pointed out.

The next 110 seats would be sold in the range of Rs 5,000 and as the date of departure arrives, the rates go up. On the last three days, the tickets are sold for Rs 7,500, which is only 75 per cent of the rates offered by other players. There is no repayment on cancellation of Rs 500 tickets, for other categories, cancellation charges vary between 10 and 50 per cent.

Mr Gopinath noted that the company saved an overall 50 per cent of the costs through cost cutting methods. He added that 40 per cent of the sales take place through Internet and call centre bookings, thereby saving up to 80 per cent on distribution costs.

While 40 per cent takes place through travel agents, where no credit transactions are allowed. Other cost savings are in cutting down frills, such as number of airhostesses on board, food served on demand, increasing number of seats by removing the business class and the extra toilet among others.

Tags: e4m

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